Forex Trading Education For The London Open
A thorough Forex trading education must include an understanding of the effect market timings can have on trading and liquidity.
Around the time of the London open there is much market activity and you can be presented with good trading opportunities.
As part of your Forex trading education, learn to analyze market conditions around London open and begin to recognize good setups.
The following questionnaire and checklist will help.
London Open Preparation
About 15 to 30 minutes before London open check the answers to these questions:
Are the MACD indicators on the 4 hour and 1 hour charts in agreement? If they are not going in the same direction be very careful!
Look out for divergence on the MACD on the 4 hour, 1 hour or 15 minute chart. Then check to see if there are any other signs price may go in the direction of the divergence.
Looking at the four hour chart, ask yourself, what is the overall trend?
Using the last swing high and swing low, use your Fibonacci tool and note the retracement and extension levels and see if price is approaching any of them.
Note price in relation to the 200 EMA (Exponential Moving Average) on the 4 hour, 1 hour and 15 minute charts. Is price bucking the trend? In other words, is price above the 200 EMA on the 4 hour and 1 hour chart but below it on the 15 minute? Then be prepared for price to go long at some stage. (Draw the opposite conclusion if price is below the 200 EMA on the 4 hour and 1 hour chart but above it on the 15 minute chart.)
Are any Economic Reports imminent?
Taking note of the candle that closes the first 15 minutes after London open, is it part of a distinctive candle pattern or is the candle itself a hammer, doji, or other shape which indicates price may be about to go in the other direction?
If I entered a trade right now in a particular direction, what would be the risk and where would I place my stop?
If, shortly after London opens, you see a number of these signs drawn from the analysis questions given above, take note and decide whether there is a good trading opportunity. Either:
trade
wait for clearer signals or a better entry point
Increase your Forex education by carrying out this kind of analysis around the time of the London open.
You will be able to fine tune your analytical skills and be in touch with the underlying feel of the market.
Forex trading education does not depend on a magical formula. What it does entail is years of work, study, practice and experience, often hard earned through watching many trades go bad.
At last, the Forex trader learns the mental and emotional skills necessary to remain disciplined at all times - the hardest and most important aspect of Forex trading education.
Practising a set procedure like the one above, while laborious to start with, will help the newer trader make fast progress toward the day when consistent profits are made on a regular basis. - 23229
Around the time of the London open there is much market activity and you can be presented with good trading opportunities.
As part of your Forex trading education, learn to analyze market conditions around London open and begin to recognize good setups.
The following questionnaire and checklist will help.
London Open Preparation
About 15 to 30 minutes before London open check the answers to these questions:
Are the MACD indicators on the 4 hour and 1 hour charts in agreement? If they are not going in the same direction be very careful!
Look out for divergence on the MACD on the 4 hour, 1 hour or 15 minute chart. Then check to see if there are any other signs price may go in the direction of the divergence.
Looking at the four hour chart, ask yourself, what is the overall trend?
Using the last swing high and swing low, use your Fibonacci tool and note the retracement and extension levels and see if price is approaching any of them.
Note price in relation to the 200 EMA (Exponential Moving Average) on the 4 hour, 1 hour and 15 minute charts. Is price bucking the trend? In other words, is price above the 200 EMA on the 4 hour and 1 hour chart but below it on the 15 minute? Then be prepared for price to go long at some stage. (Draw the opposite conclusion if price is below the 200 EMA on the 4 hour and 1 hour chart but above it on the 15 minute chart.)
Are any Economic Reports imminent?
Taking note of the candle that closes the first 15 minutes after London open, is it part of a distinctive candle pattern or is the candle itself a hammer, doji, or other shape which indicates price may be about to go in the other direction?
If I entered a trade right now in a particular direction, what would be the risk and where would I place my stop?
If, shortly after London opens, you see a number of these signs drawn from the analysis questions given above, take note and decide whether there is a good trading opportunity. Either:
trade
wait for clearer signals or a better entry point
Increase your Forex education by carrying out this kind of analysis around the time of the London open.
You will be able to fine tune your analytical skills and be in touch with the underlying feel of the market.
Forex trading education does not depend on a magical formula. What it does entail is years of work, study, practice and experience, often hard earned through watching many trades go bad.
At last, the Forex trader learns the mental and emotional skills necessary to remain disciplined at all times - the hardest and most important aspect of Forex trading education.
Practising a set procedure like the one above, while laborious to start with, will help the newer trader make fast progress toward the day when consistent profits are made on a regular basis. - 23229
About the Author:
For a free candle & chart pattern recognition reference tool click here: Candlestick Charts See how to use trendlines to get an optimum trade entry point: Drawing Trendlines
posted by X - Men @ 5:08 AM
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